Variable Life Insurance Quote
Variable life insurance is a type of permanent life insurance which provides life insurance protection with the addition of an investment vehicle. Like whole life insurance, variable life policies have a cash value, but unlike whole life, the death benefit is tied to the cash value of the policy and fluctuates depending on the success of investments. Before requesting variable life insurance quotes, it is important that consumers understand the risks inherent with variable life insurance. An online variable life insurance quote will help you find the best policy for your investment needs.
Variable Life Insurance Policies
There are a number of different types of variable life insurance available, including policies which guarantee a minimum return on investment, those which guarantee a fixed death benefit and those which allow the insured to make investment decisions and invest their own money.
Unlike whole life insurance where the cash value is invested in stable financial instruments like money markets and CDs, the cash value of variable life insurance policies is invested in equities, like the stock market, bonds, commodities, and foreign currency exchange, which entails greater risk versus reward (earnings) and returns.
Researching the life insurance company you buy a variable policy from is essential to the success of your coverage. The insurer’s track record of investments, their investment philosophy and managers determine whether your cash value grows. A variable life insurance quote will allow you to get more information when making a decision to purchase life insurance, allowing you to compare coverage, rates, and companies to choose the best policy for your needs.
Flexible Premiums
While whole life insurance has fixed premiums, variable life insurance has minimum and maximum payments. The more money paid into the policy, the greater the amount available for investment. Premiums are usually deducted from the cash value so if an insured fails to make a premium payment, the policy will not fall into arrears, or default.
If the cash value of the policy reaches zero, the policy may lapse depending on the terms of the contract. This effectively terminates the life insurance coverage.
Again, a variable life insurance quote will provide you with the cost of your policy, and give you the opportunity to compare it to what other life insurance companies are offering. Cheaper minimum premiums mean more money is diverted to your investment account and allowed to grow.
Variable Life Insurance Rates
The rates of variable life insurance differ with the provisions of the policy. A policy which guarantees a return on investment will have higher rates than one that does not. Those with a guaranteed death benefit are also not as affordable as ones that rely strictly on the growth of your investment account to fund the death benefit.
The guarantees are usually not available on policies which allow insured individuals to make investment decisions because life insurance companies cannot trust that you will necessarily invest your money wisely. While the minimum payments on variable life insurance quotes are less than those of whole life insurance quotes, this type of life insurance presents a greater risk of loss of value or insurance coverage.
Advantages of Variable Life Insurance
This type of life insurance can offer advantages to those who have incomes subject to fluctuation since the premiums are deducted from the cash value. For those with investment experience, the policies can provide higher returns than whole life policies on the accrued cash value. Variable life policies can be used as a tool in financial, estate, and life insurance planning and may help policyholders reach financial goals like retirement. Individuals can decide how much they wish to invest in the cash value of the policy.
Disadvantages of Variable Life Insurance
Variable life insurance is not a good choice for people who prefer not to take risks or for those who cannot afford financial losses. Since the death benefit is tied to the success of investments, the policy may leave financial dependents without sufficient funds to maintain their lifestyle. If the cash value reaches zero, the policy will lapse and leave the insured individual without any life insurance coverage, and a new policy will likely have higher premiums as the person ages.
Finding The Best Life Insurance Company
More than with other life insurance types, it is important to make sure that the life insurance company selling variable life policies is financially stable. If the company is responsible for making investment decisions for the policy’s cash value, individuals should check their investment history to make sure past decisions have been sound and produced a reasonable return compared to the market and other investment alternatives. Most of the best life insurance companies which offer variable life insurance quotes will provide a prospectus for their policies showing current and projected investment performance, though past performance and returns are not a guarantee of future performance.
Choosing The Right Variable Life Insurance Policy
If the primary purpose of a life insurance policy is to provide benefits for financial dependents, a variable life insurance policy with a guaranteed death benefit is the best option. Those who cannot afford financial losses should consider a variable life policy which offers a minimum guaranteed return on investments.
For people with solid investment experience and knowledge whose primary goal is to grow their investment, a policy that allows the insured person to make investment decisions may be the preferred choice.
Compare Variable Life Insurance Quotes
Variable life insurance is complex and it is important to understand the provisions of each type of policy when comparing the online quotes from different life companies. Consumers should compare variable life insurance rates of guaranteed benefits policies with other guaranteed benefits policies in order to get accurate quotes.
Buying the policy with the lowest variable life insurance quote can be a financial mistake if the policy does not provide the guarantees necessary to protect the financial future of the policyholder and his or her family.
It is important to be educated on the benefits and risks attached to the different types of policies before seeking a variable life insurance quote. TheLifeInsuranceQuote.com offers variable life insurance quote comparisons to those looking to purchase a policy that provides life insurance coverage with the option to grow your cash value or investment. Enter your zip code to begin a life insurance quote now, and find the best variable universal life insurance for your family.
